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Japan Appealed to the WTO Appellate Body Regarding the Republic of Korea’s Measure Imposing Anti-Dumping Duties on Pneumatic Valves from Japan

On May 28 (Geneva time), 2018, Japan requested an appeal to the WTO Appellate Body regarding the panel report on the measure imposing anti-dumping duties by the Republic of Korea (ROK) on valves for pneumatic transmission (pneumatic valves) from Japan, a matter that has been examined by the WTO at the request of Japan.

1. Outline

On March 15, 2016, Japan requested the establishment of a panel under the WTO Agreement regarding the ROK’s measure imposing anti-dumping duties on pneumatic valves from Japan, and on July 4, 2016, a panel under the WTO Agreement was established.

Japan claimed that the ROK’s imposition of anti-dumping duties is inconsistent with the Agreement on Implementation of Article VI of the General Agreement on Tariffs and Trade 1994 (Anti-Dumping Agreement) due to defects in the determination of injury and a causal relationship as well as in transparency in its investigation procedure.

On April 12, 2018, the WTO circulated a panel report, which presented a ruling that ROK’s imposing of anti-dumping duties is inconsistent with the Anti-Dumping Agreement because of defects in the determination of injury and a causal relationship as well as in transparency in its investigation procedure. The panel report also requested that the ROK bring its measures into conformity with the Anti-Dumping Agreement. At the same time, the panel report did not accept Japan’s claims on several other issues or make any decision thereof, since these issues were deemed to be outside the terms of reference of the panel.

Therefore, on May 28, 2018, Japan requested an appeal to the WTO Appellate Body regarding these issues for the Appellate Body’s ruling on them.

2. Details of the decision

The report recognized that the ROK’s imposition of anti-dumping duties was inconsistent with the Anti-Dumping Agreement and recommended that the ROK bring its measures into conformity with that Agreement. At the same time, the panel report did not accept Japan’s claims on several other issues or make any decision thereof since these issues were deemed to be outside the terms of reference of the panel. The major points of the panel’s ruling are as follows:

  1. The ROK’s decision to impose anti-dumping duties is inconsistent with Articles 3.1 and 3.5 of the Anti-Dumping Agreement due to defects in the determination of injury to the ROK’s domestic industry and a causal relationship between such an injury and the dumped imports from Japan.
  2. The ROK’s decision is also inconsistent with Articles 6.5 and 6.5.1 of the Anti-Dumping Agreement due to defects in the procedure, i.e., in handing of confidential information.
  3. Some of Japan’s claims, including those regarding the interpretation, etc. of Articles 3.1, 3.2 and 3.4 of the Anti-Dumping Agreement were not accepted or they were not decided on since these issues were deemed to be outside the terms of reference of the panel.

3. Future schedule

In principle, the report of the WTO Appellate Body is to be circulated to WTO Members within 60 days (with an absolute maximum of 90 days) from the appeal date, and the Dispute Settlement Body is to adopt the report within 30 days of its circulation, but the period of the examination by the WTO Appellate Body tends to be prolonged. Therefore, it is likely that it will take more than 90 days for the WTO Appellate Body to circulate its report.

 

4. References

  1. Previous news releases regarding this matter
  2. Pneumatic valves
    Pneumatic valves are parts (valves) which control the flow of compressed air in extending, retracting and rotating pneumatic cylinders, which are applied to assembly or conveyor equipment in semiconductor or automobile manufacturing plants.
  3. Anti-dumping duty
    An anti-dumping duty is a customs duty imposed on a certain product by an importing country. In case that, as the result of the investigation by the importing country, it becomes apparent that a product is exported at a price lower than the price it normally charges in the exporter’s home market (it is said to be “dumping”) as well as that the export causes injury on the importing country’s domestic industry, the importing country may take action against the dumping in order to defend their domestic industries. The amount of anti-dumping duty cannot exceed the difference between the export price of the product and the domestic selling price of the like product in the exporting country.
  4. Japan’s exports of the product in question to the ROK
    Japan’s exports of pneumatic valves to the ROK amounted to approximately 9.1 billion yen in 2017.
  5. A panel under the WTO Agreement
    If consultations between the interested parties fail to settle a dispute, based on the request from the complaining party, the WTO panel examines the matter and makes a ruling regarding consistency with the WTO Agreement. A party that is not satisfied with the panel ruling may appeal to the WTO Appellate Body.
     

Release date

May 28, 2018

Divisions in Charge

  • Information on the WTO dispute settlement in general:
    WTO Compliance and Dispute Settlement, Multilateral Trade System Department, Trade Policy Bureau
  • Information on the pneumatic valves industry:
    Industrial Machinery Division, Manufacturing Industries Bureau
  • Information on Japan-ROK economic relationship:
    Korea Office, Trade Policy Bureau

Related website

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